Hilary Mantel has done something extraordinary. She has taken that ethereal halfway house between heaven and hell, between the living and the dead, and nailed it on the page. She has taken those moments between sleep and waking, when we hardly know who we are, or why, and turned them into a novel that makes the unbelievable believable. She persuades, she convinces, she offers an alternative universe, she uses the extraordinary descriptive skills that are her trademark — Mantel does "seedy" as no one else, except possibly Graham Greene in his early novels, The Confidential Agent and Brighton Rock. She produces characters — some dead, some partly dead, some barely alive but pretending — that are as strong and vivid on the page as if they were living or dying next door — if only you cared to go there. Most don't, next door being a rather nasty and disturbing place. She's witty, ironic, intelligent and, I suspect, haunted. This is a book out of the unconscious, where the best novels come from.

If, as a reader, you feel briskly and brightly that dead is dead, alive is alive, and anything else is nonsense, this novel is probably not for you. Too weird, you'll say. But they are out there, on the road, the Alisons, the mediums. Thousands turn up to hear her, trust her.

Alison, off to her next gig in London's outer suburbs, the wasteland of people and places, the haunting grounds of the dead: "Travelling: the dank oily days after Christmas. The motorway, its wastes looping London: the margin's scrub grass flaring orange in the lights, and the leaves of the poisoned shrubs striped yellow-green like a cantaloupe melon. Four o'clock: light sinking over the orbital road. Teatime in Enfield, night falling on Potters Bar."

Alison, a size 22 on a good day, is a bridge between the living and the dead. She has inherited "the gift", as others do the gene for playing the piano. Her prostitute mother has a murdered, invisible friend, Gloria. Her grandmother's no better. Sometimes Alison gets it right, sometimes she doesn't, as she confronts her audience in scout halls and spiritualist churches. The dead tell her lies, and are as tricky as the living: channelling makes her ill; she is in constant pain. She frequents the world of psychic fairs, of crystal-gazers and mind readers; she has friends, colleagues, and makes a comfortable living as a "professional". "They don't call you mad if you make a living." A mix of therapist, fraud and saint, she comforts and consoles those whom others disregard — the old, the sick, the lonely, the uneducated and the dim, in whom the energy of life flickers so low they can barely be counted among the living.

The living and the dead demand her ear; difficult to record her life story as her sceptical assistant Collette, hoping to make money from it, demands — there is too much interference, too much clamour and complaint from the other side. Alison to Collette: "Can we switch the tape off now, please? Morris is threatening me. He doesn't like me talking about the early days. He doesn't want it recorded." Morris, the millstone round Alison's neck, is her spirit guide: a vulgar, pimply, smelly, violent and nasty character, whose position of rest is slumped against her bedroom wall, fiddling with his flies. Collette, who lives with Alison, cannot see him, but occasionally detects a kind of sewage whiff in the air and knows he's around. "Other mediums," Alison complains, "have spirit guides with a bit more about them — dignified impassive medicine men or ancient Persian sages — why does she have to have a grizzled grinning apparition in a book-maker's check jacket, and suede shoes with bald toecaps."

By an effort of will she can keep Morris at a distance, but if she does there is a crawling feeling inside her spine, "like a slow torture, until she has to give in and hear what he says. On days when she really needs a break she tries to imagine a big lid banging down on him. It works for a time. His voice booms hollow and incomprehensible inside a huge metal tub. For a while she doesn't have to take any notice of him. Then, little by little, an inch at a time, he begins to raise the lid."

Morris has friends and supporters, a murderous gang of petty thieves among whom Alison grew up, who, when alive, raped, tormented and taught her "lessons she wouldn't forget", scarring her mentally and physically. Now they are dead, they continue to abuse and upset her in any way they can. They want their revenge. Even when she was a child, the spirits were about, making a misery of her life, seizing her schoolgirl hand and making her scrawl obscenities on her exam papers so she never passed.

She can never be alone: Collette has only to get out of the passenger seat at a service station, and some spirit lady will slip in beside her and start complaining about her bunions. And if at the service station inexplicable things happen — hub caps bowling down the forecourt by themselves, top-shelf magazines tossed everywhere with no apparent cause — that'll be Morris, sniggering, ambushing Alison just when she hoped she had given him the slip.

This is the inventive, delightful, subversive aspect of the novel. Its other aspect is dead serious: a tale of wastelands, unhappiness and ugliness. In Mantel's vision it's as if the whole of outer suburbia has been taken up by brown-fill, and everywhere the second best is taking over from the best. When mediums claim they are visited by the spirits of great composers — Beethoven, Liszt — and produce new compositions at their behest, what comes out is second rate, never the best work, always the worst, done on a bad day. For all we know, Purgatory is already here, creeping ever nearer the centre of our cities.